A company who indirectly invests your money through a give back, is Lemonade Insurance. Although this example is not one of direct socially responsible investing, it is a great example of how social impact can be incorporated into a business model.

Lemonade has taken insurance, a traditional service, and changed it for good. That last statement probably has many of you wondering —  how does Lemonade’s business model work?


A Look at Lemonade Insurance

This insurance company (via their app) offers rental and home insurance with the same coverage and service that customers have come to expect from mainstream insurance corporations.

For Lemonade Insurance, changing this traditional service for good starts with the basic premise of their business model. For traditional insurance companies, each dollar that is paid out to customers is one dollar less that remains in the company’s pockets. This is a direct conflict of interest and has been removed by Lemonade. Rather than fighting over each dollar, they take a flat fee of 20% for their service.


Incorporating Social Impact into a Business Model

Okay, so how does this make them a social good company?

Lemonade donates any unclaimed money to a non-profit of the customer’s choice. When signing up for the service, customers select the non-profit or cause that they’d like to support. Lemonade takes any unclaimed money from the premiums that were paid in and claims that were paid out and donates it to these organizations. This give back is how social impact is incorporated into their business model.

Further, Lemonade is the world’s only public Benefit Corporation, a for-profit company which has been certified to meet many standards of social and environmental performance, accountability and transparency.


Is this the first time you’ve heard of Lemonade Insurance? Would you consider trying out this new social good model of insurance?


Please note that Lemonade Insurance is not yet available in Canada.